FG Plans Bond Issuance to Curb Growing Housing Shortage

Fashola insists third mainland bridge not faulty

Emmanuel Addeh in Abuja

To tackle the rising housing shortage in the country, the federal government yesterday disclosed that it had concluded arrangements to float a national housing bond for real estate developers and other operators in the sector.

The Director General of the Debt Management Office (DMO),Ms. Patience Oniha, who spoke during a housing investment forum in Abuja, organised by the Ministry of Works and Housing, explained that in spite of efforts by the government to reverse the trend, it was obvious that the public sector alone cannot fund the sector.

At the event tagged: “Exploring the Option of National Housing Bond for Housing Development: Public-Private Sector Collaboration”, Oniha lamented that affordable housing remains elusive.

She listed relatively high population growth rate, difficult procedures for land acquisition and development, inadequate funding as well as high cost of building materials as some of the challenges besetting the building industry in the country.

Oniha explained that with the national housing bond, the federal government could access large capital from markets at a lower rate, stressing that the deficit in the housing sector needed to be tackled with emphasis on affordable housing.

“Provision of affordable housing has been at the front burner but it has not been addressed. Governments, at the federal and state levels have over the years, enacted legislations, created institutions, licensed and actually built houses. These have not translated to adequate housing.

“The funding options to consider at this point include the existing structures and funding options such as the 30-year mortgage programme, with a sovereign 30-year government refinancing offered by Nigerian mortgage refinancing company.

“The other option is the national housing bond for private sector housing developers,” the DMO DG added.

The Minister of Works and Housing, Babatunde Fashola, in his remarks, stressed that the country needs a plan that was workable, accessible and sustainable to finance the housing deficit.

While stressing that the ministry was willing to float the bond under a public-private- partnership, he lauded all the players in the sector who are making sure that progress is made despite the challenges.

He said: “What we need now is a plan that is workable, accessible and sustainable to finance the housing deficit in Nigeria and to build the real housing economy that creates jobs and a sustainable career path.”

Also, Managing Director, Federal Mortgage Bank of Nigeria (FMBN) Ahmed Dangiwa, stressed that Nigeria has to look for innovative ways to expand funding for the housing sector.According to him, government alone does not have the kind of funding required to make houses accessible and affordable to all those who need them in the country.

He stressed: “We realised long ago that the kind of funding we require and desire can only be gotten through a handshake with the capital market. There were a number of challenges we faced through the FMBN issuance of N100 billion mortgage-backed bonds for the acquisition of federal government houses allocated to civil servants as a result of the monetisation policy in 2007.

“Lessons from that endeavour must shape and guide our steps towards a successful outing for the national housing bond.”

Also speaking, Minister of Finance, Budget and National Planning, Zainab Ahmed , who was represented by the Managing Director of Family Homes Fund (FHF), Femi Adewole, explained that Nigeria’s housing challenge presents itself in two forms.

According to him, these include the issue of new housing supply to meet the growing population and urban migration as well as renewing substandard housing which do not meet established standards.

She expressed that hope that the proposed bond strategy would enhance access to housing finance and deepen the participation of capital market in housing finance.

She added: “This objective of deepening the capital market in housing finance, recognises the fact that in the face of competing priorities, the government alone cannot meet the financial requirements of the housing market.

“It is in this regard that the ministry of finance, budget and national planning welcomes the idea of national housing bond being proposed. National housing bonds in their various forms have delivered housing finance systems in several countries.”

Meanwhile, Fashola, speaking through the Federal Controller of Works in Lagos, Mr. Olukayode Popoola, yesterday debunked the news making the rounds on social media that the third mainland bridge in Lagos has “opened up” and “shaking” and, therefore, unsafe for traffic.

A statement by the Director, Press and Public Relations, in the ministry, Boade Akinola, in Abuja, quoted the minister’s representative as describing the claim as false and unfounded.

Giving an on-the-spot report on the bridge, he stated that after driving through the bridge, no opening or shaking was experienced.

He, therefore, advised members of the public, especially commuters, to ignore the insinuations as the bridge, which he said is receiving regular attention along with others across the country, is safe for use. •Fashola insists third mainland bridge not faulty